United Wants to Grow at LAX, But There’s Not Much Room… For Anyone

There are two big trends in airlines these days. The first is to start an ill-conceived subsidiary with an annoying single-word name and waste a bunch of time and money on it. The second is to grow in Los Angeles. At an employee meeting in LA, United President Scott Kirby confirmed as hinted previously that United wants to turn up the heat at LAX. The only question is… how?

Less than a decade ago, LAX was serving under 60 million passengers per year. In 2009, it hit a nadir of 56.5 million. Since then, traffic has absolutely exploded. Take a look.

We only have traffic through August of this year, but it looks like LAX is on track to be near 85 million passengers, far above what it was designed to handle. If you’ve been through, you know that it is bursting at the seams. The roadways are gridlocked, security lines are long, and taxi times are some of the highest you’ll see anywhere. Air traffic delays have become much more common. And yet, more and more airlines want to fly there.

We’ve already spent a couple years watching other airlines posture. American added flights until it could add no more due to physical gate constraints. It even went too far and had to pull back some. Delta is spending billions on its move to Terminals 2 and 3 where it will do major work to create a new home. Southwest has been waiting to grow until its remodel of Terminal 1 is done next year. And Alaska is bullish on LA after buying Virgin America. It seemed like the only sane airline was United, but now that’s out the window.

In the townhall, Kirby says he wants to add more flights to smaller destinations like Medford. Both American and Allegiant already serve that small market, but apparently United thinks there’s room for one more. He wants more markets like those to help feed big international flights, like the surprise announcement of LA to Singapore. In other words, he wants to re-build what United has spent years dismantling.

I find it funny that in the FlightGlobal article, Kirby is quoted as saying “Of the big carriers, we are the most profitable carrier in Los Angeles.” I guess he wants to change that. It’s hard to imagine how every one of these airlines can be successful financially in this market. As a consumer who lives in this market, I’m thrilled and expect to see price wars making air travel far cheaper than it should be. But if I’m an airline investor, I’m wondering why everyone wants to play this game.

It would be one thing if airlines could throw some airplanes into the market and see if it works, but it’s not that simple. The aging airport can’t handle much more, so a lot of expensive work is required to even be able to try to grow.

It’s clear where the airport is going from a design perspective. It’ll be carved up into 5 fiefdoms.

  1. Southwest will finish its remodel of Terminal 1 and it hopes to build a Terminal 0 to expand on the site of an existing parking lot. That’s an old engine plant and I imagine it will require some long and expensive clean-up work.
  2. Delta and SkyTeam will make Terminals 2, 3 and the north side of the Bradley Terminal into its domain. This multi-billion projects is underway but it won’t be done for quite some time.
  3. American and oneworld can control the south side of Bradley along with Terminals 4 and parts of 5. But it still has a problem with those remote American Eagle gates and will need to find a way to grow further (the rest of 5?) so it can make for a better passenger experience. It also can’t grow without more gates.
  4. Alaska will rule at Terminal 6, but it too has no room for growth even though it wants some.
  5. United is in the middle of its own massive remodel in Terminals 7 and 8. It wants to build Terminal 9 on the other side of Sepulveda (near where the remote Eagle gates are) so it can house its Star Alliance friends. That’s going to take years and a lot of money if it ever happens.

The unaligned airlines of the world will be relegated to wherever they can fit. We already see that happening today where some airlines have ticket counters in Terminals 2 or 3 but gates in Bradley. The new midfield concourse which is connected to Bradley will help when it’s built, but that only helps with having physical gates. There’s still the issue of gridlock on the roadways. The airport thinks the landside modernization program which will build a train and a new rental car facility will help, but that won’t be done until well into the next decade.

And ultimately, you can add gates and build trains, but without more runways, there will always be a cap on growth. Unlike in Atlanta where a fifth runway was recently opened, there is no prospect for any runway growth at LAX. Heck, the airport couldn’t even get the community to agree to move an existing runway a few feet closer to their homes to provide a center taxiway to improve safety.

So what does this mean? Well, there are billions upon billions of dollars of projects underway. Airline operating costs are going to go through the roof with this kind of spending. That means a flight like United’s to Medford is going to get awfully expensive to operate, and airlines may need to cut back. But in an arms race like this where every airline wants to “win,” it means irrational decisions get made.

Even with this mad spending, LAX will run out of room. And once that happens, then what? Long Beach and Orange County have strict caps. Burbank has a little room to grow but not much, and it has short runways so will never be more than a regional airport. Ontario is just about the only option, unless you want to go even further away from LA. It’s remarkable that a region that thrived and grew with the aerospace industry in its heyday has trouble even finding an airport with room these days.

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54 Comments on "United Wants to Grow at LAX, But There’s Not Much Room… For Anyone"

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kevinaalexander
Member

#TeamCatsandDogs

Tim Dunn
Member

in a neighborhood of lions and tigers

Davey
Guest
LAX is effectively penned in by the surrounding neighborhood. Unless Los Angeles and the State of California want to spend tens of billions of dollars in eminent domain actions, the physical plant of the airport is what it is. We can make it pretty and nice and use it more efficiently, but there is a limit to what can be done. The problem is the same as the 1960s, on a far grander scale. In the 1960s, the number of flights grew exponentially and the facilities of the time did not have the capability to handle the volume. Boeing and… Read more »
Mark
Member

If the A380 (the Edsel of modern aviation) is the answer, it must be an anachronistic question…

A
Guest
What can you say, LAX is the 800 pound gorilla. I’d love to avoid it but it has the most frequency and cheapest fares. My only other non-stop option is John Wayne and the price is always double or triple what LAX is with usually not good flight time options. Besides, traffic on the 405 down there is no better than up at LAX. Depending on where I’m going I’d love Bob Hope or Ontario as options but adding a connection to make that happen is usually more hassle than LAX+traffic is. Someday that may change, but so far not… Read more »
Jeremy
Guest

I found this on Reddit the other day. Its a rant, but it seems well informed on the issue of how Alaska handles flying into LAX.

https://www.reddit.com/r/aviation/comments/73pv7u/why_flying_alaska_out_of_lax_sucks_long_rant/

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Itami
Guest

I have to question Kirby’s notion from the FG article that “The key to making Los Angeles work is really having lots of connectivity”. Aside from the fact the airport and airspace congestion mean that it’ll always be a hard place to run connection, LA really isn’t well positioned to capture a lot of flows aside from Hawaii, Australasia, and maybe some West Coast-Latin America traffic.

Anyway, if they’re so much more profitable than anyone else (also stated in the FG article) despite having less domestic connectivity, that would mean it’s already “working” for UA now, wouldn’t it?

Bgriff
Member

That ATL fifth runway was opened 11 years ago … I don’t know how “recent’ that is :)

Rowdy Yates
Guest

UAL was “flying high” at LAX until the pilot slowdown around 2000. Ever since then they have been retreating. UAL used to be in Terminal 6 also. It will take a commitment to return to that size.
As for the CTA, until the peoplemover is finished it will be a disaster thanks to Uber. Before Uber the parking structure in busy times would have 1/2 hour lines just to exit and pay because your friend or significant other would drop/pick you up. Now all that traffic is waiting at the upper level curb.

Matt D
Guest
Proof that the more things change, the more they stay the same. Ergo that despite the marketing rhetoric that would have us believe otherwise, the airlines are still very hand-to-mouth REACTIVE in the way they do things. As you correctly pointed out: United did at one time have a massive, massive presence at LAX that they dismantled and now wish they had back. Everything you are saying-anyone with even one eye on the future instead of only what’s under their nose-could’ve seen this coming. And yeah what is it about ONT that just can’t seem to attract any traffic? Twenty… Read more »
Jimmy
Guest

I’m fascinated that MFR is Kirby’s example here. I’m glad and surprised that we’re on his radar. Alaska flew once daily MFR-LAX for years but just cut that route due to the Horizon pilot shortage. American just started the route in June.

United has recently put a ton of seats on its SFO-MFR route, as much as 6 daily with 2 of those mainline aircraft, so I could certainly see the logic of taking a few of those and sending them to LAX instead.

Sam
Guest

Arent those mainline flights just UAL saving overnight gate space at SFO? Arrives late-ish at night into MFR and departs first AM flight back to SFO. Same utilization in FAT and Smurf I think. In any case, enjoy the mainline flights!

Oliver
Guest

So given the proximity of SFO and the capacity there, why would United want Medford people connect in LAX if it is more costly to get them there? Is it to fill the long hauls from LAX, i.e., do they not have enough demand and could the SFO longhauls more easily filled by others?

David M
Guest

And Horizon started the MFR-LAX route almost immediately after United Shuttle dropped it.

James
Guest

Lets not exaggerate now “taxi times are some of the highest you’ll see anywhere.”

Have you been to airports back east like ones in NYC? LAX still has rather average taxi times for major airports in the industry. DOT publishes monthly stats on this, I would provide a link but dont know it its allowed in comments.

Spirit FF
Member
LA/Ontario can be the perfect situation! Look at all the World Gateways….NRT, EZE, ICN, HKG, LHR, GRU, most of these airports are located miles from the city, in some cases farther than Ontario is to LA. However, all of these airport have some sort of link between the airport and the city – train, motorcoach, etc. For LA/Ontario to be successful, especially as an alternative to LAX, a link needs to be provided to the city. I suggest something like a Fly-Away service that serves LAX. And regarding LGB/BUR/SNA, SCAG could pressure the FAA to force cities to remove or… Read more »
MRY-SMF
Guest

There is a rail link…almost. Metrolink has a station near the airport but not directly at the airport. A people mover could solve that problem. The Riverside Line currently just runs weekdays, so that would need to be addressed.

D-ROCK
Guest

With the MSC coming in future years, are there plans to allow drop offs/ticketing/etc. from World Way West (ie coming into the airport off of Pershing?) to alleviate some of the traffic issues on World Way East? This would likely necessitate an expansion of World Way West, and possibly Imperial Hwy between the 105 and Pershing, but could allow better traffic flow for the entire airport and relieve the Main Terminal Area.

Peter Richards
Member
Great post Brett… You can answer this with a link or two, if that is easier. To a degree the total number of passengers going up in the graph for LAX is misleading… The total is the total, I agree, but of more interest is the number of local boarding passengers, vs. the number of connecting passengers. This is always a topic at DEN airport, with huge connecting traffic, vs. local boarding traffic, that the news media always skips this part of the story, only focusing on the big number. Can you dig up say 10 years of local, vs.… Read more »
letstry2
Member

What ever happened to the plan to use Palmdale as a third international airport for LA. Plenty of room to expand and they already have rail service nearby.

Jeremy
Guest

Isnt San Bernadino completely built out for Commercial service, and absolutely no takers?

Kevin Bogart
Guest

The sh*tshow became inevitable when plans to close SNA and actually develop El Toro into a passenger facility got NIMBYed to death.

Greg
Guest

I fly out of MFR all the time. This market may be small, but the airport keeps breaking records every month. We lost the Alaska Flight so there is opportunity on that route for sure. United beefed up the SFO and DEN routes with larger aircraft to support the demand. Delta just added a SEA flight and American entered the market earlier this summer with both LAX and PHX service.

kevinaalexander
Member

I’m happy to hear it! Any growth at MFR (and EUG, for that matter) is a good thing, IMO.

southbay flier
Guest

I would have thought that UA would use SFO for connecting small cities to their system over LAX since they have more options out of there?

It also seems like Mr. Kirby really liked connecting out of the way places to major hubs as well.

Rhhett
Member

Plenty of room at the reused Norton Air Force Base (San Bernardino International Airport), me thinks.. opportunity?

hsano
Member

I’m curious whatever happened to LAX’ Imperial Terminal. I remember some friends flying in and out of there in the mid-80s. Possibly on commercial charter flights.

Anthony
Member

World Airways used it…. I lived on the east coast in the early ’80s and flew World in and out of West Imperial a number of times… it was the cheapest nonstop from BWI to southern California, perhaps the only nonstop. Wide-bodies too (DC-10s).

Carl
Member

UA used to control so much gate space at LAX. All of T8, T7, most of T6, plus the remote commuter terminal. It was a strategic error to give up so much space, particularly T6 which connects to the private FIS. Especially once the CO merger happened they should have fought to keep more space in T6. More short -sighted decisions in the lying Smisek era

henry LAX
Guest

LAX mostly has nice cute terminals (some bland but at least clean) so usually you don’t have to walk too far for a connection, but the lack of rail transport is a major PITA.

ka.yun
Guest

Only 1 thing left…pull a HKG or KIX and start land reclamation. Good luck with that battle.